Swell raises $120m for virtual power plants to connect…


Swell’s solution is a two-way transactional retail offer” which separates the contractual and financing terms of the part of the solar battery system that is tied to the net billing value of customers from the part of the battery that is dedicated to meeting the needs of the VPP.

For example, in exchange for a rooftop solar and battery system that will allow a homeowner to save money and sell electricity to the grid, a Swell customer can make monthly rental or ready, he said. But in a separate financial agreement, Swell may agree to pay that customer monthly for the VPP value provided by this battery, he said – a value that can add up to thousands of dollars over the life of the VPP Contract.

This is how Swell has organized the financing of the batteries that he installs for the customers that he signs himself. Starting next year, it will begin offering similar lease and loan structures to third-party solar and battery installers it works with in California, Hawaii and other states where it makes sense, said Khan.

We mainly produce the VPP – we are creating a retail product offering for that,” he said. In other words, the company is creating a set of standardized terms for its growing network of solar and battery installers to make the VPP offers to customers on behalf of Swell.

This type of standardized approach to clearly delineating the financial value of participation in a VPP is something of a novelty today, he noted. To date, most VPPs have been started by large solar and battery installers who have created their own particular systems to reward customers, one-time upfront cash payments or gift cards to entice people to sign up. , to deferred payments based on the amount of each customer’s home contributes.

Swell’s focus on VPPs built on bilateral utility contracts, which generate well-defined revenues for years to come, allows it to pursue a more accurate monthly fixed payment structure for its customers, Khan said. . Although the company is ready to participate in wholesale energy markets in the future, these markets are more volatile and offer less certainty of long-term recovery, he noted.

Being able to fund projects against utility contracts, at least for now, brings more value to the public service, which means more value for the customer,” he said. This is also critical to achieving the company’s future plans for long-term reconditioning VPP securitization contracts, he noted – the financial structure that has driven down the capital cost of residential solar loans over the past decade.

Build the network-client technology to make it all work

To enter the entire range of values ​​for a VPP can provide utility, a VPP The operator must do more than just reduce a home’s power consumption and pump all of its battery power into the grid for a few hours of the year, Khan said. This is what most VPPs do today, whether signing up for traditional utility demand response programs or participating in wholesale energy market capacity auctions. .

Swell has a more sophisticated approach. Many of its contracts call for reducing grid demand or injecting battery power for many hours of the year, as well as more precise load reduction on specific portions of the utility grid. a public service, he noted. In the case of his 80-megawatt VPP Under contract with utility Hawaiian Electric, Swell’s batteries are even asked to remain at a certain state of discharge to absorb wind and solar power that could exceed demand on its island grids, he noted.

That’s where Swell’s gridco comes in, Khan said. At the heart of this role is Swell’s software, dubbed GridAmp, which was first deployed to support its Hawaiian Electric contract. It derives from part of the software developed by the startup ADMone of the companies that was a big player in Southern California Edison’s 2014 distributed energy supply, which Swell bought from energy storage company Fluence after Fluence bought ADMsoftware assets of in 2020.

To ensure that all houses equipped with solar panels and batteries of a VPP are actively doing what their contract requires them to do, a VPP has two main tasks, Khan said.

First, it has to connect and communicate with all the different devices it controls in homes, including batteries from a number of different manufacturers. So far, Swell said his system has run on batteries from LG Chem, Sonnen, Tesla, Enphase and Generac, and more to be announced soon. We want to talk to everyone’s batteries,” he said. This becomes even more important when we talk about batteries on wheels,” i.e. electric vehicles, he noted.

The second thing one VPP needs to do is to interoperate with a utility’s network control platform, which is not a trivial task,” he said. But we’ve come through this with flying colors” with utilities such as Southern California Edison, Pacific Gas & San Diego Electric and Gas & Electric in California and with Con Edison in New York, he said.

We can take their requests on how to ship the VPP and process them, and do that work on the back-end, and come back to it with the M&V,” or the measurement and verification that confirms each battery did what it was told to do, he said.

According to Khan, this kind of tight integration between utilities and appliances earns Swell’s GridAmp software the title of distributed energy resource management system, or DERM. Many companies use terms such as VPP and DERM to describe what they do, but there is a lot of variation between them in terms of capability and interoperability.

Broaden the definition of a VPP to meet the needs of the future network

Give utilities a way to monitor, manage, or even control customers’ solar battery systems, EV chargers, air conditioners, heating systems, electrical appliances and other electricity-consuming devices will become an increasingly important part of the push to decarbonize the grid. Only a few U.S. utilities, like Hawaiian Electric and Green Mountain Power in Vermont, have gone beyond pilot-scale efforts to use these assets ‘behind the meter’ globally – but many more are planning to do so in the future.

In addition to working with utilities, Swell is involved in larger-scale projects that could push the boundaries of the VPP concept, Khan said. An example is its work with Nimiipuu Energy, the “tribe-to-tribe energy cooperative” launched by the Nez Perce Tribe in Idaho, which hopes to link distributed solar and battery systems across tribal lands in the Pacific Northwest.

The details of this project are still being worked out, he said. But in the coming months, he said to watch for more news on a capital-An aggregation of assets behind the meter across a bunch of different tribes, to essentially create what we think is the greatest VPP in the country over time.


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